TMI Blog2022 (9) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid issues addressed by the learned Member (Technical) and the learned Member (Judicial) in their separate orders. According to the order, it has to be determined as to whether the learned Member (Judicial) was correct in holding that MTNL was not liable to pay service tax on the invoice raised by NIXI as NIXI was not a service provider and hence not liable to pay service tax or whether the learned Member (Technical) was correct in holding that MTNL is liable to pay service tax since it raised an invoice for the services provided. The decisions, on which reliance has been placed by learned authorized representative, would not come to the aid of the Department as it has been found as a fact in the present case that the learned Members have set out the point on which they differ and it is not that the entire matter has been referred to the Third Member. The appeal may now be listed on October 07, 2022 to enable the parties to make submissions. - SERVICE TAX APPEAL No. 50007 OF 2016 - INTERM ORDER NO. 19/2022 - Dated:- 14-9-2022 - MR. DILIP GUPTA, PRESIDENT Shri Puneet Agarwal, Advocate for the Appellant Shri Harshvardhan, Authorised Representative of the Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount, if any, which represents the settlement amount between the NIXI members and is calculated on the basis of the Requester Pays and as per the NIXI s Routing and Tariff Policy. As per NIXI s Policy MTNL will receive settlement payments only if the quantum of traffic used by other ISPs through MTNL s port (outgoing traffic) is less than 5 times the traffic used by its own clients (incoming traffic). 18.4 Now the issue is whether MTNL can be said to have provided the said taxable services against consideration, especially in the circumstances when MTNL is contesting that they never received consideration as such; as in their case, they received settlement amounts, if any, due to their understanding with NIXI and the said settlement amounts are calculated on the basis of the Requester Pays as per the NIXI s Routing and Tariff Policy supra. In other words, it is claimed that they never actually received any amounts either from NIXI or members prior to 01.04.2011 i.e. prior to introduction of Point of Taxation Rules, 2011; and since they never received any consideration for the period prior to 01.04.2011, no Service Tax liability can be worked out on the basis of no values, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided to other ISPs through NIXI in the form of peering arrangement. The learned Member (Technical) did not accept the contention raised on behalf of MTNL that it had not received any payment against the peering services or against the invoice dated 09.10.2013. The findings recorded by the Member (Technical) are as follows : 5. A perusal of the above definition of taxable service under the category of Internet Telecommunication Service qua the admitted facts make it very clear that the service provided by the appellant in the form of pearing arrangement is squarely covered by the above mentioned definition under section 65(57(a) of the Finance Act, 1994 . The appellant has not denied this very fact. We find that the appellant have issued an invoice on M/s. NIXI on 09.10.2013 after initiation of investigation by the DGCEI . It has been the contention of the appellant all along that amount of Rs.7,44,19,477/- for which the invoice has been issued to M/s. NIXI also includes service tax element of Rs.70,93,529/-. Thus in a way, the appellant had admitted their service tax liability on the services provided to other ISP companies through M/s. NIXI in the form of pearing arrang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber (Technical), Shri C.L. Mahar. As I find myself not in agreement with the view recorded by him, I hereby record my separate order . I find that the issues to be decided in this appeal as follows: a) Whether the demand made under the facts and circumstances is Revenue neutral. b) If the situation is revenue neutral, whether the extended period of limitation is attracted. c) Who is the service provider and who is the service receiver under the facts and circumstances. 19. Thus, evidently the transaction of Internet Tele-communication Services Internet backbone service is between 2 or more ISPs and NIXI is only a facilitator, which is neither the service provider nor the service receiver . Rather NIXI is a company registered under section 25 of the Companies Act (non-profit organization), is only a facilitator providing for carrying of data on the backbone of others service providers. In other words, a mutual or neutral exchange for the benefit of all ISPs. 20. In the facts of the present case, admittedly, the peering arrangement is between ISP s, but the appellant - MTNL has raised invoice on NIXI, which is not the service provider, nor a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is connection learned counsel referred to the questions framed by the Division Bench for determination by the Third Member as also the separate orders passed by the learned Member (Technical) and the learned Member (Judicial). Learned counsel pointed out that the learned Member (Judicial) had specifically recorded that he was unable to agree with the view recorded by the learned Member (Technical). In this context, learned counsel further pointed out that the learned Member (Judicial), after carefully analysing the system of internet peering, recorded a finding that NIXI is neither a service provider nor a service receiver and, therefore, the raising of invoices by MTNL on NIXI would not be relevant since NIXI is not a service provider. 9. On August 12, 2022, when the matter was heard, it was made clear that the order was being reserved only on the preliminary objection raised by the learned authorized representative appearing for the Department and if it is held that reference is maintainable, the matter would be heard. 10. As noticed above, the findings recorded by the learned Member (Technical) are based primarily on the fact that MTNL had raised an invoice on the IN ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
